106 Chapter Culture

Why study organizational culture?

Organizations are affected by culture in two different ways,
internally by their organizational cultures, and externally by
the national cultures of the countries within which they exist.
Beginning with organizational culture, this chapter discusses
what it consists of; where it comes from; how it affects
employees; and what different forms it takes. Then, we move
on to consider national cultures and think about how nations
differ in terms of their cultural characteristics and how these
affect human processes such as communicating, decision
making and negotiating.
In recent years, defective organizational culture has been
invoked to explain successive national scandals. Those
relating to banks and financial institutions have been the most
prominent. However, organizational culture has also been cited
as a cause contributing to negative actions of police, the media,
hospitals and local government councils. Culture is seen to
have played a role in company problems including bribery,
worker exploitation, sexual misconduct and car emissions data
manipulation. The ‘culture explanation’ has been proposed as
a counter to the individualistic justification of the ‘one bad apple’– a single person’s unethical
behaviour representing an irrational departure from ethical organizational norms.
Banks have been accused of rash lending, tax evasion, financial mis-selling, attempts
to manipulate the London Interbank Offer Rate (Libor) and the foreign exchange (forex)
markets, and even of money laundering. In the UK, fines for mis-selling include over £10
billion for pensions, £2.6 billion for endowment mortgages, and over £16 billion for payment
protection insurance (Brannan, 2017). Since 2010, the world’s largest banks have spent over
$300 billion on litigation (Shotter, 2015). Some have admitted their misdemeanours and
have been fined, sued, forced to make reparations, or all three. When challenged by the
media or an investigating parliamentary committee, their senior managers claim that the
problem was caused by a small group of staff or an isolated individual employee (‘a bad
apple’) who has now resigned, been dismissed or else is being retrained.

Home viewing
The opening scene of Margin Call (2011, director J.C. Chandor) shows a large number of
company employees, who have been laid off, leaving their office building. Their surviving
colleagues do not show any emotion or sense of loss. At the end of this scene, the character
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of Sam Rogers explains to his staff that this event should sharpen their focus on their own
individual survival and success. He tells them it’s ‘Your opportunity’. The scene demonstrates
the impersonal, instrumental culture of the bank, and provides an example of the ‘individu-
alizing effect’ of companies’ disciplinary processes. These processes are carefully designed
to align employees’ actions with the bank’s short-term profit goals, and prevent them from
caring about anything other than their own, self-interested contribution to these corporate
goals (Werner, 2014; Roberts, 2001).

Peter Day (2012) argued that the banking industry’s culture had changed from doing ‘what
is right’ to doing what is OK by the lawyers and compliance officers or, as he puts it, ‘doing
what you can get away with’. A study by André Spicer and colleagues (2014) concluded that
the ‘toxic’ and ‘aggressive’ culture inside British banks which led to the aforementioned
scandals would take a generation to change. If banking culture is the problem, then changing
that culture has to be the solution. Hill (2018) was concerned that the fading of the institutional

Buchanan, D., & Huczynski, A. (2019). Organisational behaviour. Pearson Education, Limited.
Created from warw on 2023-12-16 16:53:34.